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Videocon Telecom to shutdown operations in Punjab circle within a month


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Videocon Telecom will shut down its operation in Punjab circle on February 15th 2016, the company said in a statement displayed on its website. The telco also requested existing customers in the circle to port out to a different and urged them to exhaust any remaining balance in prepaid accounts before Feb 15th.  Videocon however did not provide any reason for the closure of service. The development was first reported by TelecomTalk.

Note that Videocon’s mobile network operations are owned by Mohali-based Quadrant Technologies. According to TRAI’s recent telecom data, Quadrant had 29.78 lakh subscribers in Punjab circle as of October 2016. Out of this only 49.53% of subscribers were active users during the same time-period. Note that between September to October 2016, Videocon added 3000 new subscribers in Punjab circle.

Videocon currently has operations in states including Haryana and Madhya Pradesh apart from Punjab, but its operations has been on a standstill. The company sold its 1800MHz spectrum in 6 circles to Bharti Airtel for about Rs 4428 crore in May last year. The deal between Airtel and Videocon was originally announced in March after Idea Cellular had called off an earlier deal with Videocon for the same spectrum.

Note that Videocon Group does not report their telecom segment revenues with their quarterly/annual results. The last known financials for Videocon Telecom was during Q3 FY16 when it reported a quarterly loss of Rs Rs 25.9 crore which reduced from Rs 44.6 crore in the same quarter previous year (Q2 FY15).

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Plans to comeback via the MVNO route

Interestingly, Videocon was planning on a 4G launch in circles like Punjab, Haryana, Gujarat and Madhya Pradesh circles, since 2015, but the plans did not go through. The company announced in September last year that they would instead use the MNVNO route to launch 3G/4G operations in the country. It added that the telecom unit was in talks with multiple telecom operators for the MVNO launch.

Last year while announcing about MVNO plans, the company’s CEO Arvind Bali said that “One of the key reasons for us to exit the mobile telecom space earlier was us being predominantly a 2G player and hence being technologically outdated. The telecom space in India and worldwide is fast adopting to newer technologies i.e. 4G.”

Bali added that in December 2015  the company had deferred 4G plans due to ‘poor acceptability of the service’ launched by other telcos. Instead, they had upgraded Videocon’s 2G network to 2.75G EDGE network. This apparently had helped it to compete in the telecom market against existing telcos offering 3G services. But the “2.75G” in Punjab is now being shut down especially at a time when telcos including new entrant Reliance Jio have announced massive investments on expanding their 4G services to keep up with the fiercely competitive market.

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Full copy of shutdown notice

Image credits: Flickr user daveynin under CC BY 2.0

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